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Yes Lifts, LLC D/B/A/ Yale Equipment & Services, LLC, An Illinois Limited Liability Company v. Normal Industrial Materials

May 9, 2011

YES LIFTS, LLC D/B/A/ YALE EQUIPMENT & SERVICES, LLC, AN ILLINOIS LIMITED LIABILITY COMPANY, PLAINTIFF,
v.
NORMAL INDUSTRIAL MATERIALS, INC. D/B/A/ INDUSTRIAL METAL SUPPLY, A CALIFORNIA CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Judge Feinerman

MEMORANDUM OPINION AND ORDER

Plaintiff YES Lifts, LLC d/b/a Yale Equipment & Services, LLC ("YES Lifts") brought this diversity action against Norman Industrial Materials, Inc. d/b/a Industrial Metal Supply ("IMS"). IMS has moved to dismiss under Federal Rules of Civil Procedure 12(b)(1), 12(b)(2), 12(b)(3), and 12(b)(6). The motion is denied.

Background

In August 2000, IMS leased six forklifts from Yale Materials Handling of Illinois, Inc. ("YMHI"), which at the time was a dealer of forklifts manufactured by Yale Materials Handling Corporation ("YMHC"). The lease set forth general terms and conditions, while schedules to the lease listed the leased equipment and set forth the lease term, the required monthly lease payments, a purchase option, and other provisions. (For ease of reference, and unless indicated otherwise, the lease and schedules together will be referred to as the "Lease.") The Lease obligated IMS to inspect, repair, and return the six forklifts at the conclusion of the lease term in November 2005, with failure to do so creating a month-to-month lease under which IMS's obligations, including its obligation to pay monthly rent, would continue. At the time the Lease was executed, YMHI assigned all its ownership rights in the Lease and the forklifts to non-party NMHG Financial Services, Inc. ("NMHG"), a Delaware corporation located in Connecticut. On January 30, 2002, YMHI and NMHG executed a Residual Value Guaranty Agreement, which obligated YMHI to repurchase the forklifts from NMHG when the lease term ended in November 2005. In 2005, YES Lifts replaced YMHI as the local dealer of YMHC equipment.

IMS made the initial lease payment to YMHI in Illinois; all other lease payments through November 2005 were sent to NMHG. When the Lease terminated in November 2005, IMS retained possession of the forklifts but stopped paying rent. In October 2006, having replaced YMHI as the local YMHC dealer, YES Lifts succeeded to YMHI's interest in the six forklifts, the Lease, and the Residual Value Guaranty Agreement. According to an affidavit submitted by its President, Kal Anglewicz, YES Lifts repurchased the forklifts from NMHG in December 2006. On April 11, 2007, IMS paid YES Lifts $49,591 in overdue rent. To date, IMS has not returned the forklifts and has not made any further rent payments.

YES Lifts filed this lawsuit on August 2, 2010. The suit alleges that YES Lifts owns the forklifts and has repeatedly notified IMS of its lease obligations, but that IMS ceased making rent payment and refused to return the forklifts. The amended complaint sets forth two counts: a common law contract count alleging that IMS breached the Lease, and an account stated claim for $123,732 in unpaid rent.

Discussion

IMS has moved to dismiss on several grounds: (1) under Rule 12(b)(1) because YES Lifts lacks standing; (2) under Rule 12(b)(2) because IMS is not subject to personal jurisdiction in Illinois; (3) under Rule 12(b)(3) because the Northern District of Illinois is an improper venue; and (4) under Rule 12(b)(6) because YES Lifts failed to state a contract claim as to one of the six forklifts, and failed to state an account stated claim. Each ground is considered in turn.

I. Standing

IMS's challenge to YES Lifts' standing implicates the court's subject matter jurisdiction, and thus is addressed first. See Citizens Against Ruining the Env't v. EPA, 535 F.3d 670, 675 (7th Cir. 2008). In considering a Rule 12(b)(1) motion, the court may look beyond the complaint's jurisdictional allegations and consider evidence submitted by the parties. See Alicea-Hernandez v. Catholic Bishop of Chi., 320 F.3d 698, 701 (7th Cir. 2003). Where the defendant produces evidence casting doubt on the plaintiff's standing, "[t]he presumption of correctness . accord[ed] to a complaint's allegations falls away," Commodity Trend Serv., Inc. v. CFTC, 149 F.3d 679, 685 (7th Cir. 1998), and the plaintiff bears the burden of proving that standing exists, see Lee v. City of Chicago, 330 F.3d 456, 468 (7th Cir. 2003).

IMS contends that YES Lifts does not have standing because the Schedules show that YMHI assigned to NMHG all of its rights, title, and interest in the forklifts in 2000, and because the amended complaint attaches no evidence that YES Lifts obtained any ownership of or interest in the forklifts. YES Lifts was not obligated to attach to the complaint evidence demonstrating its ownership in the forklifts. See Arnold v. Janssen Pharmaceutica, Inc., 215 F. Supp. 2d 951, 962 (N.D. Ill. 2002) ("federal courts, unlike Illinois state courts, do not require that critical documents be attached to the complaint"). However, because evidence cited by IMS (the Schedules) shows that NMHG possessed all rights in the forklifts and Lease for at least some period of time, YES Lifts must adduce evidence to prove its standing.

YES Lifts has satisfied its burden. As noted above, YES Lifts submitted an affidavit from Kal Anglewicz, its President, averring that YES Lifts purchased the forklifts from NMHG in December 2006. YES Lifts also submitted: (1) a letter agreement for the repurchase of the forklifts; (2) payment statements and check stubs for the purchase; and (3) a letter from NMHG confirming receipt of payment. IMS argues that Anglewicz's affidavit fails to establish a "link between the subject forklifts and YES Lifts," and that it instead "interweaves a myriad of corporate names in an apparent attempt to establish standing." Doc. 28 at 5. IMS discounts the letter agreement because it is addressed not to YES Lifts, but to YES, Inc., a non-party to this litigation. IMS also argues that the payment statements, check stubs, and confirmation statement fail to identify which entity (YES Lifts or YES, Inc.) paid to repurchase the forklifts.

IMS's submissions fail to persuade. Although the letter agreement identifies YES, Inc. as the party, it is addressed to Kal Anglewicz, President of YES Lifts. Moreover, by its express terms, the letter agreement applies not only to YES, Inc., but also to any "affiliated company" that becomes an "authorized dealer" of YMHC equipment in the region. Doc. 27-3 at 1. As noted above, YES Lifts replaced YMHI as the authorized YMHC dealer in 2005. In addition, IMS made a back rent payment to YES Lifts in April 2007, thus implicitly recognizing that YES Lifts owns the forklifts. Finally, and most significantly, Anglewicz expressly averred that YES Lifts purchased the forklifts. Taken together, the evidence sufficiently establishes, for purposes of standing, that YES Lifts has an interest in the forklifts and the Lease. See Capital Leasing Co. v. FDIC, 999 F.2d 188, 191 (7th Cir. 1993) ...


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